Climate and environment: what we know and what we need to know

Expanding welfare in a world with climate change requires meeting two fundamental challenges. First, economic growth must properly account for the damaging effects of environmental externalities. Secondly, societies need to build resilience and adapt to the changes in climate that are already upon us. In this chapter, we summarise the existing evidence on how countries can undertake these two necessary transitions. Rich or poor, big or small, these transitions apply to all countries across the world. At the same time, climate justice is pertinent, as countries or individuals most vulnerable to climate change and environmental decline are likely to have contributed least to the problem. We argue that innovation is the path through these challenges. Technological and institutional innovations can help overcome the trade-offs that make political action on the environment so difficult. While much is known, a great deal remains unclear. We lay out where researchers can support policymakers by addressing knowledge gaps that can form a new research agenda for sustainable growth.